General Dutch Energy Law Updates

Following the Opening of the Dutch Budgetary Year (commonly referred to as: Prinsjesdag), the outgoing Dutch government announced several interesting regulatory changes that are relevant for the Dutch energy sector.

Stimulating offshore wind

To start with, the Dutch government published its (emergency) Offshore Wind Action Plan for 2025 (“the Action Plan”) to turn the tumultuous tide for the offshore wind tenders. The Dutch government has reserved as of 2026 EUR 1 billion for realizing 2 GW by offshore wind farms. In short, The Action Plan contains two possible solutions for continuing the rollout of offshore wind energy: 

1. stimulating the construction of offshore wind farms (supply stimulation); and
2.  stimulating the development of electricity demand (demand stimulation).

On the short term regarding the demand-side, the Dutch government announced to extend the ETS Indirect Costs Compensation Grant Scheme (Subsidieregeling Indirecte kostencompensatie ETS, “IKC-ETS”) up to and including 2028. This scheme aims to provide financial compensation to companies that are exposed to a significant risk of carbon leakage as a result of the electricity prices applied in Europe, which also include costs passed on for greenhouse gas emissions. The Dutch government has made EUR 150 million available for this scheme to improve the business case for offshore wind.

For the long term, the Dutch Government has compared three other pricing mechanisms to support the further development of offshore wind, i.e. the introduction of: (i) so-called Contracts for a Difference (“CfDs”), Power Purchase Agreements (“PPAs”), and a Temporary Offshore Wind Financial Support Mechanism (Tijdelijk ondersteuningsmechanisme windenergie op zee, “TOWOZ”). (two-way) CfDs are two-way contracts between a power-generating facility operator and a counterpart, usually a public entity, that provides both minimum remuneration protection and a limit to excess remuneration. According to Article 19d of the amended Electricity Regulation 2019/943 (revised by the Electric Market Regulation 2024/1747, “EMDR”), CfDs will become available in 2027. Notably, the Dutch government remains reluctant to introduce so-called Contracts for a Difference (“CfDs”) to stimulate, specifically, offshore wind energy production before 2027. According to the Dutch government, the actual effects of CfDs for offshore wind remain uncertain. Particular concerns relate to the:

• the efficiency, effectiveness, and legitimacy of a CfD for industrial electrification, also in relation to other instruments that affect the price of electricity;
• the coherence with existing subsidy instruments, such as the SDE++ grant, CfD renewable onshore, and CfD wind energy;
• the design choices for such an instrument, also in relation to the current state aid frameworks; and
• the expected budgetary implications.

It is stated in Annex 2 to the Climate and Energy Policy Note (“Annex 2”), which encompasses the legislative program for climate policy, that the legislative proposal for further accommodating the implementing of the EMDR is under legal scrutiny by the Dutch Council of State. This proposal will, among other things, introduce CfDs in the Dutch legal system and is set to enter into force on 1 July 2026.

PPAs are contracts under which a natural or legal person agrees to purchase electricity from an electricity producer on a market basis. In comparison to CfDs, the Dutch government holds that CfDs on the demand-side will be also competing with PPAs. According to the Dutch Government, the effect of a larger PPA market as a result of the PPA guarantee fund is likely to be reduced if demand CFDs are also used. Consequently, the PPA market may even shrink as a result. 

In addition, the TOWOZ is a grant scheme in which the Dutch government would subsidize the excess project costs for only mark risks that are related to the offshore wind sector. This goes further than the ICK ETS, which only compensates for the higher electricty costs that are caused by the costs for obtaining emissions rights under the EU ETS related to the production of electricity. 

Stimulating RFNBOs and Green Gas

To implement the emission reduction targets as set out in RED III, the Dutch government introduced the RED III Environmental Management and Excise Duty (Amending) Bill (Wijziging van de Wet milieubeheer en de Wet op de accijns in verband met de implementatie van Richtlijn (EU) 2023/2413, “RED II Amending Bill”). These provisions are further complemented by the Draft Amending (Rhev) Decree).

Furthermore, the Dutch government intends to introduce a blending obligation to upscale the share of biofuels and RFNBOs.  Currently no such obligation exists under Dutch law, but the Dutch government did initiate two legal proposals in that regard an announced another initiative. 

The first proposal concerns the Green Gas Blending Obligation Act (Wet bijmengverplichting groen gas, “the Draft GGBO Bill”). This proposal introduces a blending obligation for green gas to upscale the amount of biogas by requiring energy supplies to supply an increasing amount of green gas to their end users. It covers buildings, the transport sector, and smaller industries. Although the Draft GGBO Bill refers to ‘green gas’ and not ‘biogas’ as the produced biogas has not been purified and prepared to have the same quality as natural gas. That said, this definition does allow green gas to be produced from biogas, which is derived from bio-based raw materials that react with additional hydrogen, as long as the gas produced is of natural gas quality and the hydrogen is produced from renewable energy.

Initially, the intended date of entry into force of the Draft GGBO Bil and its accompanying subordinated legislation was set on 1 January 2026. However, this date has been postponed to 1 January 2027, in order to accommodate the expected increase in costs that this bill and lower regulations will entail.

The second proposal concerns the publication of a consultation version dated 31 October 2024 regarding the draft proposal for an Annual Industrial Renewable Fuels of Non-biological Origins (Blending Obligation) Act (Wet jaarverplichting hernieuwbare brandstoffen van niet-biologische oorsprong in de industrie, “the Draft RFNBO Bill”).^[5] This proposal applies, specifically, to the industrial sector and obliges this sector to increase the use of renewable hydrogen.

Lastly, we note for completeness’ sake that the government initially announced a third initiative, i.e. an additional blending obligation of CO₂-free energy carriers (which also includes renewable hydrogen). This obligation was set to be part of a yet to be published (draft) Zero CO₂ Conversion (Gas Power Plants) Subsidy Scheme (Subsidieregeling ombouw CO2-vrije gascentrales) to ensure that the subsidy also leads to an actual and significant reduction in CO2 emissions. The government intended to introduce this blending obligation of 1% in 2030, subsequently, increasing this obligation by 2032 and up to 5% in 2035 in light of the anticipated realisation of a Dutch hydrogen transport grid. However, the budgetary room needed to support this scheme was reduced due to decision to provide support to the offshore wind sector. Consequently, the Dutch government stated that they were forced to cancel this scheme and, by extend, also the green gas blending obligation for gas power plants.

[5] It is noted that the consultation version of the draft Bill was amended by the government because it initially allowed only Dutch-produced biogas. According to the Commission, this stipulation was incompatible with EU law, after which the Dutch government made some revisions. However, in its Parliamentary Letter dated 4 July 2025, the government stated that it had also amended the initially suggested revisions to meet the Commission’s requirements. The amended draft Bill has not yet been published. The government must first send its official statement to the Commission, after which it will send the final amended draft Bill to the Advisory Division of the Council of State for formal legal advice. This advice and the draft Bill will then be sent to Parliament and published. See also: Parliamentary Letter dated 9 December 2024.